Czech Railways will have to adapt as property sales wind down
Czech Railways has two years, writes daily Mladá fronta Dnes, to adapt long-term strategies to ensure continued profits and growth. Until now, the state-owned firm relied heavy on the sale of property as a financial buffer but that "well" will soon run dry at a time when debts at the firm are on a rise.
One building is a hotel in Prague’s Michle area, the other two, administrative centres in Brno and Plzeň. This year, sales so far are also nothing to write home about, amounting to only 85 million. An offer for the Michle site, the company’s CEO confirmed, was far too low. Meanwhile, unfulfilled tasks remain: Czech Railways wants to see the completion of the sale of plots for a development of an office complex which would likewise boost traffic at Masaryk station and to complete other projects at Holešovice and Smíchov.
What are options moving forward?
According to Mf Dnes, Czech Railways will aim to pave the way for new revenues in additional ticket services.
Revenues in the billions, from the aforementioned sale of stations to the Infrastructure Administration, as well as additional projects, should help cut into Czech Railways overall debt, reaching 31.6 billion. The CEO of Czech Railways made clear to the daily the situation was not critical: although debt will culminate in the next two years, massive investment in the modernization of its railway fleet will also wrap up and Czech Railways will want to maintain new acquisitions at the level of write-offs, replacing old equipment with new at the cost of around 2.5 billion.